You spend much of your life working to make a living and to prepare for a retirement that enables you to enjoy the best things in life. However, reality does bite: regular expenses can take a sizable chunk out of your future retirement fund. You can fix this situation by figuring out what you really need in life.
So, here are some ideas on how to boost your superannuation over time.
Some Practical Points
Before Anything Else, Evaluate Your Superannuation Fund
Your super fund ought to be working for you – and not the other way around. Make it a point to review your fund every year, particularly where fund performance, investment options, and insurance are concerned.
It also helps to get in touch with the Australian Taxation Office (ATO) when you review your fund, as you can log into their website to check if you’re missing or are unaware of any super payments made to you for work done in the past.
Low Income? No Problem
If you earn $37,000 or less a year and receive taxable super contributions, such as compulsory employer contributions under the Superannuation Guarantee scheme, you could be entitled to government payment.
These payments can amount to as much as $500 per year. The good news is, as long as your fund has your tax file number (TFN) you don’t need to do anything to receive this payment, it will be paid directly into your super account.
Spousal Contributions are Sweet
Those with a spouse who earns less than $40,000 a year can receive a tax offset if they make super contributions on their behalf.
The tax offset is 18 per cent on spouse contributions of up to $3,000, resulting in a potential tax offset of up to $540 a year for the contributing spouse.
Give More to Get More
Trust us: it’s not as ridiculous as it sounds.
Giving more from your before-tax salary and asking your employer to put the amount into your super account can help boost your balance – this is often referred to as salary sacrifice.
Depending on your income, these super contributions are taxed at a concessional rate of either 15 or 30% – compared to the rate of tax you pay on your personal income, this could help grow your investment faster. Limits apply to how much you can contribute while enjoying this potential tax advantage.
Is it worth taking a risk?
Did you know that considering higher-risk investments could help build your retirement fund faster?
This is because the potential long-term returns on these higher-risk investments will often be higher than the potential returns on lower-risk investments.
But before deciding to take on higher-risk investments, it’s important that you find investments that fit your financial goals, investing time frame and risk tolerance.
This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.
Please see our Financial Services Guide for more information.
Precept Financial Services Pty Ltd (ACN 140 538 147) as trustee for SF Unit Trust trading as Precept Financial Services is an authorised representative of Charter Financial Planning, Australian Financial Services Licensee and Australian Credit Licensee No. 234665